Multimodal thinking

Source: Technology Digital

Date :28/08/2007 15:05:50

Small changes, significant rewards

Food miles, carbon foot-prints, congestion, environmental concerns and corporate social responsibility - all contemporary issues, and all potential problems for modern businesses. How companies address and tackle these issues is a fundamental part of business and it’s moving higher up the corporate agenda. Robert Jervis outlines the advantages a ‘multimodal’ strategy can deliver

Despite the bad press that big business often receives when it comes to these issues, it’s not all doom-and-gloom. There are many examples of creative thinking at companies that have embraced the challenges and are profiting from them. Whilst not earth-shattering in their own right, small changes to business practices can bring significant rewards.

Food miles

Tesco has recently teamed up with Eddie Stobart to run trains from the Midlands to Scotland, using new, innovative 45’ containers. The result? Over 13,000 annual truck journeys saved – 3,000,000 lorry miles – or, 180,000 tonnes of freight removed from the roads, each and every year. Stobart claims this will generate environmental savings of over £3,000,000 over three years.

Meanwhile, Sainsbury’s have recently been trialling deliveries from their East London depot to a store in West London via barge. This resulted in fewer truck miles, greater reliability, faster delivery, and less cost. And, of course, it’s more environmentally friendly.

ASDA, where possible, sources its goods locally. However, due in part to globalisation, imports from Asia have significantly increased. To increase its flexibility, ASDA moved its biggest import centre to Teesport, near Middlesbrough. In going so, it has saved 2,000,000 road miles per year. Furthermore, according to Simon Pearson of ASDA/Wal-Mart, “A reduction in ASDA’s annual road mileage, due purely to a modal shift to rail equates to 4,000,000 miles a year. However, overall, we have saved in excess of 17,000,000 miles a year through network efficiencies.”

B&Q has also changed its operation. Instead of its Asian imports coming in to Southampton, they now go to Rotterdam and get shipped to local east coast ports for local delivery.

Of course, all this is both good business and environmentally sound. It is underpinned by very simple concepts – that of making best use of existing infrastructure, the best deployment of IT advances and listening to one’s customers. No doubt, the thought of gaining competitive advantage is also strong motivation!

Creative logistics

In a larger sense, the concept is that of Multimodalism – utilising several different transport modes and therefore using resources in their most efficient way. Nothing will replace the truck for local deliveries – but for some companies - there are other ways to skin the cat for longer journeys. Moving goods from Düsseldorf to Ireland? Try barge and short-sea shipping! Scotland to Milan? Try rail! Indeed, in Europe, both member countries and the EU are supporting these initiatives with substantial grants.

From an environmental point of view – shipping is the greenest mode. Even though some ships seem horribly polluting, it’s still the most environmentally friendly way to transport freight tonnage. Next comes rail, then road freight and then airfreight. However, across the board, all of these modes are becoming greener – and being used in the correct deployment for length of journey.

Furthermore, for many routes and trades, congestion (especially in some ports) is becoming an issue. Goods are getting delayed and stock is not hitting the shelves when it needs to be there. Costs are increased. Creative distribution strategies can avoid this.

Of course, one size does not fit all – if consumers want east African cut flowers in December, they will still need to be air-freighted in. Ditto computer chips from Asia and pharmaceuticals from Europe.

There are some strange anomalies too. Icelandic fish is shipped to Grimsby for processing – and once a week – an airfreight service leaves Humberside airport for Reykjavik with processed fish on board!

Globalisation has lead to many phenomena – and one of these is the huge amount of imports from Asia – specifically China. This seems unlikely to stop, but in some instances, consumers and retailers are making a conscious effort to buy/stock locally sourced products – especially food – to support local farmers and reduce food miles.

With a sound Multimodal strategy, both international and local product lines can co-exist, customers have choice, environmental impact and congestion is reduced, and reliability is increased. Companies who embrace and meet these challenges will gain a competitive advantage over their peers. Indeed, some companies are already beating their competitors - Multimodalism is already here.

Multimodal 2008 is a conference & exhibition that will provide you with an insight in to how your company can benefit from creative logistics. It is being staged at the NEC Birmingham from 22-24 April 2008. You can get more information from www.multimodal.org.uk and registering for the email newsletter.